Development capital for emerging tech ventures
Development capital is what we call investments in early stage ventures, that are transitioning from initial development to sales. They often face high costs for product development and market launches, so they rarely generate a profit in their first years. As a result, they need equity capital or loans to help them bridge the gap until they become profitable.
Development capital is normally provided over a period of several years. The investment process is similar to that of traditional venture capital. Industrifonden's commitment is limited in time, and we work actively with the company to help it develop and create value. This is achieved in close cooperation with the company's management and other investors.
The large part of Industrifonden's investments consists of development capital provided through the Technology and Life Science business areas.
Investment criteria
Our criteria to invest in companies that need development capital:
Industries
IT, telecom, electronics, industrial technology, clean tech (environmental and energy technology) and life sciences (pharmaceuticals, medical technology, and diagnostics).
Investment amount
SEK 5-100 million per company.
Form of financing
Equity capital or convertibles that can later be converted to shares. Industrifonden is an active minority investor that seeks ownership interests of between 15 and 50 percent.
The company must have:
- A unique business model, technology, product or service
- The willingness and ability to grow
- Prospects of profitability in a growing international market
- Assertive, competent management
- Clear exit opportunities
Exit/sale
Industrifonden's commitment generally lasts between five and ten years. The fund's shares are sold either to an industrial or financial player, a co-investor or in connection with an IPO.
Want to learn more about development capital investments?
Contact our investment team in the Technology and Life Science business areas.